A rule of thumb has it that the percentage of your portfolio devoted to bonds should equal your age. But many baby boomers are drifting far from that formula.
In the 60-to-65 age bracket, 30 percent have placed almost all of their savings in stocks, and 52 percent allocate more than 70 percent of their portfolio to equities, according to an analysis of 10,000 users of FeeX, which helps users find lower investment fees, CNNMoney
Many financial advisers recommend that investors in that age group put a maximum of 60 percent of their savings in stocks. The problem for older people investing in stocks is that if the market plunges, they may not be around long enough to see the rebound.
"If you're a couple of years away from retirement, you're really rolling the dice at the roulette table," Erik Laurence, vice president of marketing at FeeX, told CNNMoney.
Market declines can come suddenly. The S&P 500 dropped 10 percent from its record high Sept. 19 to its low Wednesday.
So what should older investors do? "Diversification is so important," Scott Tiras, a financial adviser for Ameriprise, told CNNMoney.
Meanwhile, the S&P 500 index soared 1.3 percent Friday.
"The market has a buy-the-dip mentality right now," John Canally, an economic strategist at LPL Financial, told Bloomberg
. "The disconnect between the sharp market drops this week and the pretty good U.S. fundamentals might have gotten some people interested in buying again."
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